The U.S.-Mexico Border Economy in Transition

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1 The U.S.-Mexico Border Economy in Transition

2 About Us Independent, nonprofit research organization. Research, outreach, impact (practical recommendations). U.S., Mexico and Canada. U.S.-Mexico border specialists. Global-regional-local. Focus on key partnerships.

3 The U.S.-Mexico Border Economy In Transition Overview 27 recommendations. Extensive stakeholder input from CaliBaja, Arizona/Sonora, Laredo/Nuevo Laredo and Paso del Norte regions. Contents 1. Institutions Erik Lee 2. Economic Development Erik Lee 3. Border Crossings Christopher Wilson 4. Energy Rick Van Schoik 5. Human Capital Ruth Soberanes Report available at naresearchpartnership.org.

4 Background 1. Great Recession National Exports Initiative 2. Export-led economic recovery (esp. local and state). 3. Slow recovery in U.S. border states (except Texas) 4. Focus on jobs. 5. A major shift in the bilateral conversation from security to commerce. 6. Elections matter (Mexico 2012) May 2013 HLED launch 7. Mexico s economic reforms. 8. Ongoing issues with the border s image and reality.

5 Institutions Strengthen, expand and promote institutions that represent and serve the U.S.-Mexico border region economy. Border Governors Conference Border Legislative Conference Border Mayors Association

6 Economic Development Support and develop inclusive binational Mega Regions along the U.S.-Mexico border to enhance collaboration between border communities and economic stakeholders.

7 Economic Development Promote cross-border urban planning and development in border communities.

8 Ports of Entry Support the active participation of all levels of government, as well as the business community and nongovernmental organizations in crossborder transportation infrastructure and staffing. Source: Window on State Government, State Functions at the Texas-Mexico Border and Cross-Border Transportation, information in the table from the Texas Department of Transportation. Location and Ownership of International Bridges along the Texas-Mexico Border Bridge County Ownership B&M Bridge at Brownsville Cameron Private Progreso-Nuevo Progreso Hidalgo Private Starr-Camargo Bridge Starr Private Fort Hancock-El Provenir Hudspeth US International Water and Boundary Commission Fabens-Caseta Bridge El Paso US International Water and Boundary Commission Bridge of the Americas (BOTA) El Paso US International Water and Boundary Commission Presidio Bridge Presidio State of Texas Veterans International Bridge at Los Tomates Cameron Cameron County and City of Brownsville Gateway International Bridge Cameron Cameron County Free Trade Bridge at Los Indios Cameron Cameron County, City of San Benito, and City of Harlingen Pharr-Reynosa International Hidalgo City of Pharr Bridge McAllen-Hidalgo-Reynosa Bridge Hidalgo City of McAllen Roma-Ciudad Miguel Alemán Starr Starr County Bridge Juárez-Lincoln Bridge Webb City of Laredo Gateway to the Americas Bridge Webb City of Laredo World Trade Bridge Webb City of Laredo Laredo-Colombia Solidarity Bridge Webb City of Laredo Camino Real International Maverick City of Eagle Pass Eagle Pass Bridge I Maverick City of Eagle Pass Del Río-Cuidad Acuña Val Verde City of Del Rio International Bridge Ysleta-Zaragoza Bridge El Paso City of El Paso Good Neighbor Bridge El Paso City of El Paso Paso del Norte Bridge El Paso City of El Paso

9 Ports of Entry Expand and aggressively promote trusted traveler programs, which are the most cost effective way to improve border efficiency ,000 and security Trusted Traveler Programs Enrollment ( ) 0 346,773 77,999 2,863 61,000 10,662 SENTRI (individuals) FAST (commercial drivers) CTPAT (companies)

10 Consider new crossborder transportation options, such as (restored) trolley lines or dedicated bus lanes, which could reduce wait times and give a sense of binational unity. Ports of Entry

11 Establish a binational education task force focused specifically on the border region, where the opportunities are greatest and costs are least. Human Capital

12 Promote greater collaboration between regional universities, community colleges and technical schools, government and the private sector to create, attract, and retain the labor pool necessary to fill industry needs at the border. Human Capital

13 Barrels (Bbl) Per Day Energy, Natural Resources and Water U.S. and Mexican state and local governments should increase engagement with the business community and federal governments to prepare for and capitalize on energy development. 900, , , , , , , , ,000 0 Texas Eagle Ford Shale Oil and Natural Gas Production 2008 through April Jan-Apr 2014 Shale Oil Natural gas 4,000 3,500 3,000 2,500 2,000 1,500 1, Source: Eagle Ford Consortium and Railroad Commission of Texas Produyction Query 0 Million Cubic Feet (MMcf) Per Day

14 Energy, Natural Resources and Water Protect the environment while developing energy, emphasizing sustainable economic development, which strategically prioritizes the use of limited resources (such as water) to maximize human development and ensure environmental sustainability.

15 U.S.-Mexico Border Industry Mapping and Stakeholder Engagement Project, Apr.-Sept Project looks at quantitative and qualitative issues that affect border industries that are concentrated, binational and dynamic. Designed to support the crossborder economic development work of bilateral (HLED), federal, state and local entities. Area of analysis = border counties and municipios. Binational focus groups in San Diego, Tucson, El Paso, Laredo and Brownsville.

16 Where do Cluster-Based Strategies Fit in to Overall Economic Development? Anti-Competition "Industrial" Policy Definitions and policies vary, but at its worst, can be: -Firm Specific -Weakens Competition and thus incentives to improve -Politically driven -Inconsistent across administrations Examples: Subsidies, Tariff Barriers, Negotiated tax incentives Cluster-Based Strategies -Data reveals existing industrial clusters with roots (not politically driven) -Industry/Cluster specific -Pro-competition (seeks diversity and numerous firms competing within sector) Examples: Specialized Education Programs, Industry Worker Training Programs, Specialized Infrastructure (port, pre-inspection), Business-Regulator Dialogue, Joint Marketing Macro and Overall Business Environment Improvements (Cross-Cluster Strategies) -Subregion, Region or Nation specific -Pro-competition (robust business environment fosters competitive environment) Examples: General Education, Responsible Fiscal and Monetary Policy, Trade Liberalization, Cutting Red- Tape, Simple Tax Code, General Infrastructure (overall highway network, broadband, etc.), Broad tax incentives

17 Nogales, Sonora - Most Concentrated Industries Nogales Office Administrative Services Aerospace Product and Parts Other Specialty Trade Contractors Other Support Services Medical Equipment and Supplies Agriculture, Construction, and Mining Semiconductor and Other Electronic Other Electrical Equipment and Navigational, Measuring, Hardware Manufacturing

18 Nogales, Sonora - Employment in Most Concentrated Industries Nogales

19 Pima County - Most Concentrated Industries Pima County Navigational, Measuring, Electromedical, Clay Product and Refractory Rooming and Boarding Houses RV Parks and Recreational Camps Business Support Services Urban Transit Systems Gambling Industries Other Leather and Allied Product Aerospace Product and Parts Metal Ore Mining

20 Pima County- Employment in Most Concentrated Industries Pima County

21 Thank you. Let s stay in touch. Erik Lee Executive Director North American Research Partnership erik@naresearchpartnership.org Tel.

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